Anyone who has flown AA in the last year or so will probably have an inkling that they are not having the best of times. Gary Shteyngart in the New York Times is a little more assertive in describing their malaise:
You, American Airlines, should no longer be flying across the Atlantic. You do not have the know-how. You do not have the equipment. And your employees have clearly lost interest in the endeavor. Like the country whose name graces the hulls of your flying ships, you are exhausted and shorn of purpose. You need to stop.
He then describes a nightmare Paris to New York flight that was diverted to Heathrow. What is troubling, though, is this paragraph later in his account. It describes their experience getting through immigration at Heathrow:
[The AA representative] took us to one immigration lane, which promptly closed. Then another, with the same result. A third, ditto… So, ducking under security ropes, knocking some down entirely, we rushed the border with our passports held aloft, proclaiming ourselves the citizens of a fading superpower.
Now, I have sympathy for these folks, really I do. But does anyone believe that if you had tried that at JFK you would not have been corralled by police for hours — or shot? Is it remotely acceptable that a bunch of entitled AA passengers evaded Heathrow security because they had had a bad day? Can I now ignore the formalities the next time I arrive at Boston if my flight is late (which, if it’s an American Airlines one, it probably will be)? C’mon, UK Borders Agency, surely your only rational is to impose equal pain on everyone – or did I miss the legislation exempting Americans?
Bloomberg draws some lessons from the report on the crash of Air France 447 for US pilot training. 447 failed due to a high altitude stall.
Pilots of small planes practice diagnosing and recovering from stalls using actual aircraft, but it’s too risky and expensive for the major airlines to do this in their planes, which can cost as much as a few hundred million dollars apiece. Thus, high-altitude conditions need to be programmed into scenarios on the flight simulators that airline pilots use to train.
Second, the report found that pilots aren’t thoroughly trained to deal with sudden developments. Flight 447’s pilots were confounded when they lost airspeed readings because of a malfunctioning part; one of the pilots inadvertently put the plane into the stall that doomed it. French investigators wrote that training scenarios are too familiar to pilots and don’t sufficiently surprise them or test them with harrowing situations. In light of this observation, American aviation officials would do well to scrutinize the simulations used by U.S. airlines to make sure they’re challenging and ever- changing.
Reading this, it struck me how useful it would be to develop stress scenario training for central bankers. It would not be easy to design a simulator flexible enough to cope with a wide range of policy reactions, but it would be a great tool once you had it. You could have historical scenarios from the panic of 1825 through the Great Depression to Swedish and LTCM crises and imaginary ones like Euro breakup or the failure of a triparty repo clearer.
It’s a travesty. The worst ten airlines in the world list is out and BA isn’t on it. OK, Iberia do make it in, but for shame BA, you tried so hard – it must be gutting not to have your contribution recognised.
Warning: this is a change from our usual programming. If you are not interested in the theory of interacting systems, you might want to skip it.
One of the things that has really changed with the widespread use of computer models is the achievability of perfection. What do I mean? Well, one big difference between a computer model and reality is the ability to restore state. That is, to make the world just like it was earlier. The undo button. You really can, in a model (and by `model’ I include programs like Word or Excel, computer games, and so on as well as more obviously model-like things) undo the result of some action as soon as it goes wrong. That is much much harder in the physical world, as anyone who cooks or does DIY will affirm. What this changes is the how hard it is to do some difficult things.
Suppose you have a 1 in 1000 chance of getting something right. What that thing is doesn’t matter – think of making the perfect Bearnaise, or building a shed, or jumping just right so that Lara Croft navigates over a chasm. In the real world, it may take many many tries before you get it right. The amount of time required is considerable. In a computer model, though, if you save frequently, you can just restore from the last good point. So if that 1 in 1000 is the result of three separate 1 in 10 actions, then you can treat each separately. As soon as you get one of them right, you never have to do it again, as you can restore the state just after you succeeded. This dramatically changes the amount of time needed to do difficult tasks that rely on a sequence of smaller but still hard-to-do things. (It changes the hardness in particular from multiplicative time in the number of steps to additive time – as any complexity theorist will tell you, that is huge.) At least in a virtual world, perfection really is sometimes possible.
Note to CEOs everywhere. No one, not your shareholders, not your staff, not your clients, thinks you deserve a $87,000 rug. Buying one shows a spectacular failure of judgment. Buy something cheap and inoffensive instead. But don’t go too far.
Update. Thain is paying the $1.2M back, according to a letter leaked to FT Alphaville. Good on him.
One of the points I have repeatedly mentioned is that it did not take a very large fall in house prices to create the credit crunch. Contagion and widespread bank stress had begun by early 2007 despite falls at that point of only 10% or so nationwide. But of course the falls in the worst affected areas – including Florida, Nevada, and California – were rather worse. And since 2007, as Bloomberg points out, things have got quite a lot worse. In particular rising volumes of foreclosures are driving steep price falls:
A total of 19,926 new and existing houses and condos sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up from 13,240 a year earlier… The median home price in the region fell 35 percent to $278,000…
Foreclosed homes accounted for 56 percent of Southern California’s December sales, more than double the amount a year earlier, MDA DataQuick said.
Such transactions made up almost 70 percent of sales in Riverside County, where the median price plummeted 41 percent to $209,000. Sales jumped 77 percent to 4,435, MDA DataQuick said.
Really… January 18, 2009 at
I leave you lot for a week in Asia, and when I come back, the banking system is broken, RBS has announced the largest UK corporate loss ever, BofA has taken another $20B of TARP money and a $100B asset guarantee, and Ireland has nationalised Anglo Irish Bank. I can’t leave you alone for a moment can I?
Which systems work well in a town tells you a lot about the place. The title of this blog was inspired by the wonder of the Italian coffee system, something that provides good, cheap coffee everywhere. In France, it’s the trains. They just work. Similarly the New York taxi model – cheap, available, often don’t know where they are going – is much better than the London one – expensive, disappear after 11 or in the rain, and do know where they are going (but will take you the long way anyway). That’s insightful.
In Cambodia, the tuk tuks are very effective, much like New York taxis. Water is on sale everywhere, reflecting a hot country with a lot of tourists from cooler places doing more exercise than they are used to. (Have you seen how steep those temple steps are?) And petrol is sold in glass bottles, every few hundred yards. You never have to worry about your tuk tuk making it to a petrol station, as the petrol vendor is always within walking distance.
This make me wonder about a variant of google maps where instead of plotting where xs are, they plot the average density of xs. Or even the difference between the density here and the average density in place of comparable population density. This isn’t quite a sharp idea, yet, but with a bit of luck you can see roughly what I’m getting at. It would be a kind of ‘what’s different about here’ plot.
Hiatus January 10, 2009 at
I shall be in Asia for a week of so, so posting is likely to be intermittent at best. Wish me luck – while the long haul is with Qantas, some of the intermediate trips are with airlines whose safety record is marginally better than that of a large bank…
11/11 November 11, 2008 at
Walking through Green and St. James’ Parks on Sunday, and listening to silence on the radio at 11 o’clock, I am struck for the first time in some years by the dignity of Armistice day. Given Iraq and Afghanistan I suppose we are more ready to remember war, and more aware of its consequences. The New Zealand War Memorial – introduced I think in 2006 – is particularly simple and moving: we shall remember them.
I will be away for two weeks. Please try not to let Fannie or Freddie fail while I’m gone: I would hate to miss a big splash. And if MER, C, UBS and the rest can keep the writedowns under $10B each for a few weeks, that would be good too. But hey, I’m a realist, big things sometimes happen.
Happy New Year. Here is a Blade- Runner- esque scene, again of Hong Kong, to celebrate. Isn’t it strange to think that its vision of the future is so powerful that it still holds sway despite the film itself being 25 years old?
I was in Cambridge on Thursday, seeing some friends. We visited the Fitzwilliam museum, an interesting if flawed establishment. (Don’t hang the Rembrandt so you can’t see the face for the glare of the lights, please, folks.) A few minor carps aside, though, it is interesting how well the museum system works. The works are well looked after, they can be see, for free, much of the time, and it is uplifting and delicious to see three Monets from one seat. Here’s a mask to whet your appetite.
This is a fantastic area of countryside to the West of Exeter. I went walking with some friends on Saturday, and it was lovely: refreshing, beautiful and calming. It made me think about the importance of conserving country- side like this, of managing the transport and planning systems so that people can live close to where they work and travel between them efficiently. We have dysfunctional public transport system, a planning system that is about to be torn apart in the pursuit of unnecessary growth and a government with the inability to take responsibility for anything. If this toxic mix results in us losing views like this, we will have lost something truly valuable.
Part of the problem is that we do not think of the outcomes of policy decisions holistically. Why not demand that rules and laws are prefaced by a statement as to their intent and metrics to measure success? “This bill is intended to … Measure of success include…” Then we can understand what the authorities are trying to (as opposed to what they say they are trying to do), judge whether their metrics measure the desired outcomes or not, and so objectively hold them to account.
Think of those proposed revisions to planning: are they about economic growth or the protection of the environment? If, as I suspect Gordon Brown would claim, the answer is ‘both’, how do we balance those two goals? Once we know what it means to succeed at the game, we can analyse the strategies that people will take in playing it.
…or at least its transport infra- structure is. After a week of com- muting around this city, I am astonished the locals tolerate the traffic, pollution, and squalor: far too many people drive, and as a consequence neither buses nor taxis are worth taking, at least between 7am and 10am or 5pm and 8 or 9 in the evening. Even at 4pm the traffic is starting to back up, despite the fact that most people don’t finish work until 6. The metro system isn’t too bad, but it only covers the centre of town and the stations are absurdly close together. How did they let it get this bad? Surely this can’t work for anyone (however nice the architecture you get to look at while you are in the jam)?
It has taken me a little while to come up with anything approaching a coherent set of thoughts on Montreal, and this is definitely a first cut. Part of the interest in Quebec (sprinkle accents over that) of course lies in the mixture of American and French influences. The ferocious consumption and competition of the US is moderated by a more European pace of life and a seemingly broader set of societal concerns. There is a cosmopolitan tolerance, but the place still looks much like a US city. And, noticeably, there are a lot of mendicants on the street (hence the picture), which feels vaguely shocking, given the whole caring shared destiny vibe. But that just emphasises that there isn’t a linear scale of social security, just a large set of choices, mostly independent of each other. You can set the game up with lots of different rule sets and the Quebecois have taken one set somewhere between the US and France. I’d love to see one of those cute n-D visualisations (where n=9 or something) which maps the various social policy choices and shows where Quebec comes out vs. France and an average US state, say.
A friend and I went to see the rehang of the Tate Modern yesterday. It’s interesting, perhaps flawed in places, – whoever decided that it would be good to hang the futurists in a big gaggle high up on one wall should be taken out and re-educated, – but compared with, say, MOMA in New York, it’s imaginative, focussed and thought-provoking. But more than that, it’s free. MOMA is twenty bucks. Now suppose you were an economist working for the state of New York or the city or whoever. How exactly would you decide whether it was better, on purely rational economic grounds, for MOMA to be free or not?
Obviously it will cost money to open it for nothing, but if you do, lots of people will go who could not or would not afford $20. And some of them will be inspired to create things, some of which will sell for cash. So making MOMA free will generate some extra economic activity. But how much, compared with the costs? How could you estimate it? While you are thinking about that, here’s a picture of the silver birches outside the Tate, taken by my phone with its easy to fool exposure control.
Normal service will be resumed later this week, but meanwhile here is a yellow beaked hornbill. Not quite systems thinking perhaps (although there is plenty about the game of managed ecology in general and game reserves in particular to keep us busy), but isn’t it pretty?
My apologies for the lack of postings over the last little while: I have been in Montreal (from whence some comments shortly), and will soon be going to Jo’burg for another few days. It has rained more or less everywhere I’ve been so far recently, so you can probably count on some pictures of rain-soaked wild animals in due course. But meanwhile here is a fine flour mill from Montreal:
Why are expensive hotels so dissatisfying? Thanks mostly to my job, I have had the opportunity to stay in a variety of not-cheap hotels around the world, and overall, the experience is much worse than staying in budget places. The problem is they promise so much: in a cheap hotel, you are grateful for a comfortable bed, a quiet room, hot water in the morning and neither boiling nor freezing during the night. It is not difficult to meet these rather basic needs.
An expensive hotel, on the other hand, promises fine dining, attentive service in every detail, a delightful experience. But these hotels are staffed by people, and people are often not very good at considering others. In the Ritz, a snooty waiter ruins the experience. At the Georges V, a small room leaves you vowing never to return. The pervasive smell of boiled cabbage in the Ritz Carlton’s meeting room is intolerable. A maid who cannot read the ‘Do Not Disturb’ sign at the Park Hyatt infuriates. Hotels at this level have set up the game so that they are likely to fail: anything less than fantastic is unacceptable, because you have been promised fantastic.
One motto for anyone delivering a good or a service should be `meet customer expectations’. If you can’t, change their expectations. Sadly, most luxury hotels are competing to raise expectations, not to surpass them. Perhaps a new business model is needed?